Jury finds in favor of CM Punk in defamation trial brought by WWE doctor

June 5, 2018

Chicago Tribune reporter Gregory Pratt reports that a jury has found in favor of CM Punk and Colt Cabana in the defamation trial brought by WWE physician Chris Amann.  Per Pratt, the jury deliberated a couple hours before rendering their verdict.

After the podcast, in February 2015, Dr. Amann had sued Punk and Cabana after an infamous podcast where Punk did not hold back in giving his opinion of the physician’s treatment of an injury he sustained.

The doctor brought the suit in Cook County Circuit Court (IL) alleging that Punk and Cabana had made defamatory statements regarding his professional duties as a medical doctor for the company.  Specifically, it was Punk that gave his opinion of the doctor during the podcast.

SI posted an excellent legal analysis of the potential issues of the lawsuit prior to the verdict.  It gave the overarching issue of whether podcasts could be subject to defamation claims.

In closing, the lawyers for the WWE physician requested $3,989,000 in damages which amounted to $1 for ever person who downloaded Cabana’s podcast episode plus additional punitive damages.

Payout Perspective:

Testimony during the trial about the lump on the back of CM Punk appeared to be the key issue.  It was what Punk complained about during the podcast and there was testimony by Punk’s wife (A.J. Lee), massage therapist and others that corroborated Punk’s claim.  Although he may have sensationalized the issue on the podcast, the jury ultimately determined that he was telling the truth and was giving his opinion. Truth is an ultimate defense to defamation.  Notably, SI indicated that Punk was appearing in character on the podcast, which I am not sure was the case and I’m not clear if that hinged on the analysis.  As we know with litigation, it is not over until its over.  There are post-trial motions and the possibility for appeal.

As for Punk, he has his second fight of his UFC career this Saturday in Chicago

Plaintiffs file Reply Brief supporting class certification in Antitrust lawsuit

May 31, 2018

The Plaintiffs in the UFC Antitrust lawsuit have filed its Reply Brief in support of its motion for class certification.

Plaintiffs Reply ISO of Class Certification by JASONCRUZ206 on Scribd

Zuffa Oppo to Class Cert by JASONCRUZ206 on Scribd

The four factors for class action certification are the number of potential members of a class, the commonality of questions of law or fact, the typicality of the claims or defenses of the class and the adequacy of the representative classes.  In its, opposition brief, Zuffa took aim at the four factors in concluding that Plaintiffs have not served

Plaintiffs stress “four fundamental errors” in its reply brief.

First, Zuffa errs that there can be no legal challenge to its business practices.  Plaintiffs cite illegal conduct that allowed Zuffa an advantage in its industry.  The Plaintiffs rebut Zuffa’s assertion that wage level is the only way to evaluate compensation citing that its use is a way to masks Zuffa’s abuse of monopsony power.  Again, this is the overarching argument between wage level which measures compensation in dollars versus wage share which measures compensation as a percentage of revenues.

Second, Plaintiffs argue that Zuffa misunderstands the antitrust violation which is a scheme to acquire and maintain monopsony power.

Third, plaintiffs claim that Zuffa failed to respond to the ways in which they show common impact.  Plaintiffs claim that common evidence was capable of proving widespread harm across a class, courts usually certify classes in antitrust cases.

Finally, Plaintiffs’ claims are typical of the class as it refutes Zuffa’s claim that challenges the typical damages may have left some proposed class members uninjured.  In refuting this argument, Plaintiffs argues that there is no law which must show all class members were harmed to satisfy the typicality requirement.

Zuffa also argues that since Plaintiffs are ex-fighters, they will not protect the interests of the current Fighters.  However, Plaintiffs cite case law stating that former employees may represent present employees.  Plaintiffs also cite the “transitory” nature of a fighters’ career.  Since they are independent contractors, it would be easy for Zuffa to insulate itself from a class action lawsuit as the promotion could release a fighter it believed would be part of a lawsuit.  Moreover, Plaintiffs argue that former fighters have less of a concern with retribution from the organization versus a current fighter bringing a lawsuit.

Payout Perspective:

As in most Reply Briefs, Plaintiffs support its initial motion while rebutting opposition from Zuffa’s response to the motion.  As will be one of the bigger issues in the “battle of the experts” is the calculation of damages through wage share or wage level.  Plaintiffs endorse the wage share model to determine whether fighter wages were suppressed through illegal conduct versus Zuffa’s claim that wage level should be used to evaluate whether there were any factors to show such illegal conduct on the part of Zuffa.  Of course, each version supported by the party helps their respective viewpoint.  The Reply addresses Dr. Singer’s expert report and his theory of Zuffa’s Foreclosure Share – the proportion of fighters subject to its exclusive contracts – affects its Wage Share.  Dr. Singer’s theory of liability model suggests that Zuffa’s Exclusive Contracts are part of an unlawful scheme which correlates with underpayment of fighters due to illegal foreclosure (i.e., the measure of damages).  MMA Payout will keep you updated.

Catching up with Zuffa’s Reply Briefing in Antitrust Lawsuit

May 30, 2018

As we prepare for another filing in the UFC Antitrust lawsuit this week, MMA Payout takes a look at the briefing in supporting the motion to exclude plaintiffs’ experts.

Earlier this month, Zuffa filed briefs in support of its Motion to Exclude the testimony of Dr. Andrew Zimbalist.  They seek to exclude the testimony pursuant to Federal Rule of Evidence 702 and the Daubert case which allows the Court to determine whether certain expert testimony may be used at trial prior to trial.  The standard for admissibility is based on 5 factors which look to the scientific means of the method and whether they are generally accepted within the industry.  Zuffa argues that Dr. Zimbalist’s expert testimony as indicated in his submitted report conducted “no analysis and used no standards in his yardstick method.”

Zuffa Reply ISO Motion to Exclude Zimbalist by JASONCRUZ206 on Scribd

Zuffa argues that there are standards for the ‘yardstick method’ which Dr. Zimbalist uses, but he chose not to do so.   Specifically, Zuffa argues that Dr. Zimbalist did not conduct an empirical analysis of product markets, business models, revenue sources, or inputs.  According to Zuffa, Dr. Zimbalist did not consider any of the other factors that must be assessed using the yardstick method including “demand conditions or whether the comparators stand in the same relative position in their markets.”

In its analysis, the Dr. Zimbalist is measuring damages by wage share.  However, Zuffa argues that this measure is not accurate since it neglects to use individual salaries.  Zuffa argues, “[i]t is highly speculative for Dr. Zimbalist to assume without foundation that these hundreds of negotiations would add up to a similar wage share as the contractually define wage shares collectively bargained by the unions in the comparator sports.”

Zuffa goes on in its brief to argue that Dr. Zimbalist’s comparison to boxing is premised on faulty data as he uses Golden Boy to measure the entire boxing industry.  Zuffa argues that Dr. Zimbalist utilized data from another’s expert report in Golden Boy’s lawsuit against Al Haymon without independently verifying the data.

Finally, it argues that Dr. Zimbalist’s expert reports do not support Dr. Hal Singer’s expert reports and analysis and vice versa.

In supporting its motion to exclude Dr. Singer, Zuffa argues once again that wage share is not an acceptable practice for measuring damages.  Specifically, Zuffa takes issue with a regression analysis performed by Dr. Singer in his model.  Zuffa argues that the expert report finds anticompetitive effect which “directly contradicts” the fact that actual compensation has increased.  Second, the regression analysis performed by Dr. Singer shows that there is no anticompetitive effect and there is no relationship between the conduct and actual wages.

Zuffa Reply ISO Motion to Exclude Dr. Singer by JASONCRUZ206 on Scribd

The reply briefing to plaintiffs’ opposition to exclude their retained experts’ reports are based on the difference regarding wage share and actual wages.  The assertion by Zuffa is that “an analysis of wage share does not provide a reliable means of inferring anticompetitive effect, antitrust injury or damages because it cannot distinguish between a decrease in wage share as a result of the challenged conduct and a decrease as a result of legal and procompetitive business developments that increase overall revenues.”  Zuffa argues that there is no case law or economic literature supporting a regression analysis with wage share as a dependent variable inferring anticompetitive conduct.  Defendant also points out that the method would assume that a mandatory share of revenue is allocated for compensation. Yet, Zuffa compensates athletes based on “its perception of the athlete’s value and market forces, leading to a wide range of athlete compensation.”

Zuffa also argues that Dr. Singer’s reports do not show causality between his findings an the alleged anticompetitive conduct.  Zuffa claims that Dr. Singer’s regression analysis does not answer the key question of what proportion of increased revenues are attributable to athletes.  Rather, Dr. Singer relies upon economic theory which cannot replace Daubert standards according to Zuffa.

Ray Borg goes after former managers with commission complaint

May 29, 2018

MMA Junkie reports that Ray Borg has filed a complaint against the New Mexico Regulation and Licensing Department alleging that his former management team was never licensed as a coach or manager.  His former management team sued Borg for unpaid commissions.

Junkie has a copy of the Amended Complaint filed by Wild Bunch Management, LLC in the Second Judicial District Court in the State of New Mexico.  Borg filed an Answer to the Amended Complaint on May 16, 2018 per court records.

The New Mexico Regulation and Licensing Department oversees the state’s athletic commission and licenses athletic trainers.  Prior to his official court response, he filed the complaint with the commission claiming he committed multiple breaches of a management contract and was treated unfairly.

Payout Perspective:

The commission complaint is ancillary to the lawsuit filed by Borg’s former management although it seems like a scorched earth strategy as he claims in the complaint that his former manager held unsanctioned fights known as “smokers” illegally.  These claims are unlikely to deflect the claims made against Borg, but it will show that the flyweight is not the only one that may have been in the wrong.

UFC issues statement on Nick Diaz

May 27, 2018

The UFC has issued a statement on Nick Diaz in light of his arrest in Las Vegas on Thursday night related to domestic violence allegations.

Via UFC.com:

“UFC is aware of the recent arrest of middleweight athlete, Nick Diaz. The organization does not tolerate domestic violence and requires all athletes to adhere to the UFC Fighter Conduct Policy. Every athlete is deserving of due process and this situation, as with any official allegations, will be duly reviewed and thoroughly investigated by an independent party.”

Payout Perspective:

Despite not being active, Diaz is one of the more popular figures in the UFC.  The UFC understands this and it will be interesting to see how this issue is handled.  While there are rumors of the incident surfacing, its ultimately up to legal authorities in Vegas as to whether there is enough information to prosecute Diaz.  The UFC will give Diaz the benefit of the doubt, but there should be a point where the company must draw a line.

 

 

Nick Diaz arrested on charges of domestic battery

May 25, 2018

Nick Diaz has been arrested in Las Vegas on charges of domestic battery by strangulation and misdemeanor domestic battery.  The alleged victim was female.

According to a report from MMA Junkie, 12 units were dispatched to the scene on Thursday evening and Diaz was combative with officers during his arrest.  A bail hearing is scheduled for Saturday morning at 9:00am.

Diaz has just come off of a one-year suspension from USADA for a whereabouts violation of the UFC anti-doping policy.

Payout Perspective:

The Saturday morning hearing is due to his constitutional right to have one 48 hours after an arrest.  If the reports are true, Diaz becomes another UFC fighter with a criminal record.  This one will come with a lot more scrutiny since it is related to domestic violence.  Although the UFC has seemingly overlooked Greg Hardy’s past, we will see what happens with Diaz.  He’s been a popular figure despite his abrasive behavior, but this latest episode seems to be different.

Deontay Wilder and Alexander Povetkin head to appeal

May 25, 2018

The Deontay Wilder-Alexander Povetkin legal drama will not end.  The parties have given notice that they are appeal the federal district court’s decision.

Letter From Wilder 05.25.18 Appeal by JASONCRUZ206 on Scribd

The Southern District Court of New York has had a trial and summary judgment motions in this contentious lawsuit over whether Povetkin’s failed drug test for Meldonium was a breach of the fight contract between the parties or whether Wilder not heading to Russia, where the fight took place, was a breach of the contract.

Thus far, a jury found that Povetkin ingested Meldonium post-January 1, 2016.  The Court affirmed the jury decision after a Motion for Reconsideration and/or New Trial  by Povetkin (and his promoters at World of Boxing)was denied.  Yet, in litigating the other causes of action, the court determined on Summary Judgment that Povetkin did not breach the Bout Agreement although a jury trial determined that Povetkin ingested Meldonium and concluded that a VADA test on April 27, 2016 showed Meldonium in his system.  The court deferred to the WBC’s discretion to rule on culpability for its anti-doping program.  As such, the court concluded that since the WBC believed that Povetkin did not violate the Bout Agreement.

From our previous post on this issue:

In this case, after issuing several conflicting and indecisive rulings, the WBC finally decided on November 7, 2017 that notwithstanding the jury’s verdict in this case, it would adhere to its earlier decision that it was not possible to determine whether Povetkin ingested Meldonium after January 1, 2016.  In other words, the WBC exercised its discretion to determine that Povetkin did not violate the CBP [Clean Boxing Program, the drug testing entered into by the boxers].”

In addition, the Court has released the escrow funds held up by Deontay Wilder after the fight did not go forward.  However, the Court did not grant WOB the $2.5 million in liquidated damages that was included in the escrow agreement which would have been triggered if it was found that there was a breach.  The Court noted that there was not a judgment filed against Wilder and that his representatives made the objection for disbursement in accordance with the agreement.  The Court did not find a breach of implied covenant of good faith and fair dealing. It also did not find Wilder guilty of breaching the Bout Agreement for not showing up in Russia for the fight as the Court opines that there was no evidence of his absence for the fight in Russia caused the cancellation.

The District Court ordered the release of the money held in escrow of over $7.1 million dollars.

A cause of action by Povetkin for defamation against Wilder was not litigated, but its likely that this will be determined after the appeal.

Payout Perspective:

It only makes sense that this case was going to be appealed.  Both sides are appealing ruling from the court.  Wilder is appealing the Summary Judgment ruling which essentially overturned a trial court decision that Povetkin took Meldonium.  Povetkin might be seeking to go after Wilder for breach of the Bout Agreement and obtain a $2.5 million liquidated damages award that is a part of the escrow agreement.  The legal drama shall continue and MMA Payout will follow.

How will SCOTUS ruling on sports gambling affect MMA?

May 14, 2018

The United States Supreme Court struck down the federal law banning sports gambling.  As a result, states can now legalize sports betting.  The ruling will certainly affect the sport of MMA.

As of Monday, New Jersey plans to be the first state to offer legal sports betting based upon the new ruling.  Delaware, Mississippi, New York, Pennsylvania and West Virginia are also expected to make it legal in quick order.

Prior to the ruling, Nevada had been the only state allowed to offer sports betting.  Oregon, Delaware and Montana maintained sport lotteries.

The major sports leagues: the NFL, NBA NHL and Major League Baseball as well as the NCAA supported the federal law but were ruled against by the highest court.

The most salient point of today’s Court ruling: “Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.”  This statement affirms the belief that states are free to regulate if federal law does not conflict.  The Court believed the federal law in place regulated sports gambling.

Sports leagues such as the NBA and MLB are looking for “integrity fees” which would be a way to profit from the new opportunity.

For those wondering, the UFC has spoken favorably about legalization.  It may seem evident that the previous UFC owners, the Fertitta brothers, would be partial to sports gambling since their money came from the casino industry.  But, under questioning from New Jersey’s lawmaker Frank Pallone (operating on his own agenda) last December, the UFC’s Vice President of Regulatory Affairs Marc Ratner supported sports gaming.  Although he did not speak for the UFC, he indicated that the company had the infrastructure to deal with any issues with respect to match-fixing based on gambling.

Pallone first asked whether UFC was bet on in other parts of the world. Ratner stated, “I know offshore there’s betting everywhere. In Nevada, all our fights are put on the board, you can bet on the first fight through the last..Personally, not for the UFC, I am in favor of sports betting around the world, around the country especially.” He also asked about how the UFC preserves the integrity of the sport with the knowledge that gambling is ongoing.  He also asked whether gambling has helped with fan engagement to which Ratner stated it did.

We will see how states will deal with sports gambling and the impact it will have in MMA.

Payout Perspective:

Notably, PFL undertook a uniform policy but one of the bans on sponsors was that of gambling sites.  The sponsors have already been turned into the promotion so for some fighters they cannot take advantage of a potential market.  However, other leagues where fighters solicit sponsors might see an uptick.

It is still too early to see how state-sponsored gambling may impact MMA.  Daily Fantasy Sports for MMA came and went as the industry did not seem to stick with the sport of MMA.  But, the potential ease and accessibility of gambling will likely build for years to come.  With many regional MMA cards happening at tribal casinos, you can envision the venues building sportsbooks so you can make bets prior to going in and watching the fights.  This represents the good and bad of the potential future for MMA and sports gambling as the concern over the social issues (i.e., addiction) and integrity will be something to monitor.

There will be an influx of sponsors coming into the market for both fighters and leagues.  Pun intended, but you can bet on gambling being a part of the MMA landscape in the future with the potential revenue that may come from this ruling.

Show Money talks ESPN/UFC Deal and Leslie Smith

May 14, 2018

It’s that time again. Show Money is back talking about the ESPN+/UFC deal and Leslie Smith’s NLRB Charge against Zuffa.

Court issues final order in Wilder-Povetkin but appeal likely

May 10, 2018

The Deontay Wilder-Alexander Povetkin case may be heading to an appeal if you believe the parties.  The Court has issued a final judgment and order in the case and indicated that money held in escrow be sent to World of Boxing.

Order May 10th by JASONCRUZ206 on Scribd

Final Judgment by JASONCRUZ206 on Scribd

The legal saga that has seemingly dragged on for years looks to be heading to the Second Circuit Court of Appeals.  With the exception of Povetkin’s legal cause of action for Defamation against In a letter from Povetkin/World of Boxing’s attorney’s, they advise the Court that Wilder intends to appeal the Court’s summary judgment ruling.  Povetkin/World of Boxing proposed to the Court that the remaining claim for Defamation is stayed until the resolution of the appeal.

The Court issued an order which ends the case (for now) and allows for World of Boxing to regain over $6 million held in escrow since April 2016.

Despite the ruling, the parties fought over whether the escrow funds could be disbursed or whether the Defamation claim must be litigated.  This contentious litigation will likely continue into the appeal.

Payout Perspective:

The parties of 30 days from the date of the Order to appeal the court ruling.  It looks like that Deontay Wilder’s legal team will do so and its hard not to blame them based on the ruling from the Court which appears to contradict a February 2017 trial that found Povetkin ingested Meldonium post-January 2016.  However, the Court adhered to the WBC’s ruling that it could not determine when Povetkin ingested Meldonium.  MMA Payout will keep you posted.

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